GGRAsia – Ainsworth to pay US$38 mln for Nova Technologies

Ainsworth to pay US$38 mln for Nova Technologies

Nov 18, 2015 Newsdesk Industry Talk, Latest News, Top of the deck, World

Australia-based casino slot machine maker Ainsworth Game Technology Ltd announced on Tuesday it has entered into a binding agreement to acquire 100 percent of the equity in U.S.-based Nova Technologies LLC.

The deal – on a debt free basis – is worth US$38 million to be paid in cash on completion, Ainsworth said in a filing to the Australian Securities Exchange. The firm hopes to close the transaction in early 2016, “subject to all necessary regulatory approvals,” it added.

Privately held Nova is a manufacturer of products referred to in U.S. markets as “Class II” games – sometimes also referred to as bingo games – as well as systems for such games. It has also deployed selected so-called “Class III” games – sometimes referred to as casino games – in certain markets, according to Tuesday’s filing.

Nova’s game library includes more than 30 proven Class II titles placed across more than 1,300 units in markets throughout the United States. With this acquisition, Ainsworth will have over 2,600 units in operation in North America on a daily fee, said the firm.

“The transaction allows us to enter Class II gaming in an immediate and significant manner. This deal represents a complementary extension of available product to the direct benefit of Ainsworth’s current customer base across the Americas,” said Danny Gladstone, chief executive of Ainsworth, in a statement.

He added: “This acquisition is earnings accretive from day one. For these reasons, it makes both great strategic and financial sense for Ainsworth.”

The Australian slot machine maker said it received a credit approval for an AUD90-million (US$64.1-million) secured loan by the Australian and New Zealand Banking Group Ltd. The new banking facility will replace the current AUD30 million unsecured loan and be used to fund the acquisition of Nova, said Ainsworth.

Commenting on the deal, Ainsworth’s chairman Len Ainsworth said: “We have been disciplined and highly selective in our acquisitive growth strategy and we are now excited to have an excellent platform that we can substantially grow and develop over time.”

In August, Ainsworth announced that profit for the 12 months ended June 30 increased by 14 percent year-on-year to AUD70.4 million.

The firm’s CEO said in Tuesday’s statement that Asia made a good contribution to sales in the last fiscal year, especially the Philippines.

“We have a limited exposure to Macau where regulatory change has affected the market. We expect strong growth this year in this business,” added Mr Gladstone.

On Tuesday, Ainsworth additionally announced it expects to appoint Heather Scheibenstock to its board as an independent non-executive director commencing in mid-January, subject to regulatory approvals.

Ms Scheibenstock was most recently senior vice president of table games at Solaire Resort and Casino, a property managed by Philippines-based Bloomberry Resorts Corp. She has also worked as general manager for gaming at The Star, a property owned by Australian casino operator Echo Entertainment Group Ltd.